N650b debt: Oil marketers urge speedy payment

Image result for Major Oil Marketers Association of NigeriaOil marketers have appealed to the Federal Government to hasten payment of the over N650 billion fuel imports subsidy arrears owed them (marketers) over the years to save their assets from being taken over by banks.

The marketers, under the aegis of Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMAN), Independent Petroleum Products Importers (IPPIs) and Independent Petroleum Marketers Association of Nigeria (IPMAN) made the appeal in Lagos.

The Executive Secretary of DAPPMAN, Olufemi Adewole, who spoke on behalf of the marketers, urged the government to lessen the bureaucracy involved in the payment process.

Adewole said the inability of the Federal Government to pay the debt has resulted to massive job losses in the downstream subsector of the oil and gas industry, and affected the marketers’ business operation.

Adewole said that 60 per cent of marketers have been forced out of business as banks have taken over their depots, assets and properties due to their inability to pay back monies borrowed to import fuel.

He said many marketers were forced out of business, while others are struggling to survive due to the government’s inability to settle the subsidy arrears, saying the development is threatening investment in the downstream subsector.

The DAPPMA N scribe said, although, the Federal Government has earmarked money to clear the debts, the marketers were yet to be paid.

“The debt has had very adverse effects on our operations. I am aware of two depots that have been forcibly taken over by banks because they got injunctions from the courts. They did so the moment they heard that the National Assembly approved payment of the debt to marketers. Unfortunately, as at September 27th 2018, the money was yet to get into our accounts.”

He said the other challenge is that many of the marketers have laid off more than 90 per cent of their staff because of financial constraints.

Adewole however said that the government has promised that part of the money would come as promissory note and cash saying the information gathered was that the government may pay only in promissory note. It means you have to go back and discount this promissory note in the bank. This means we are losing because the money has been delayed and this adds to the interest to be charged on our accounts.

He said the interest came about as a result of devaluation of the naira from N197 to N285 a dollar, adding that what was approved for payment is not the actual amount the government owed.

An independent marketer urged the government to deregulate the downstream sector, adding that deregulation would curb the huge amount of money spent on subsidy. According to him, marketers have run out of cash and their businesses are gradually going moribund.

“No marketer can import petrol with the present price differential. We cannot buy fuel at N174 per litre at the international market and sell at N145 without being paid the differentials. The NNPC imports fuel and uses its discretion to allocate products to marketers, adding that if the subsector is deregulated it would also help government to invest the subsidy money into other sectors.

The Chairman of South-West Chapel of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Mr. TayoAboyeji, said loading activities had been bad at most private depots. He attributed the situation to inability of marketers to import petroleum products.

He added that some depots have to convert their workers into contract staff. “Government should find a way to pay the marketers and deregulate the subsector to allow more players into the industry,” he added.